14/03/14 -- Soycomplex: Beans closed lower, with the worst of the weakness at the front end in expiring Mar 14. Concerns about the Chinese economy, and the suggestion that Reuters apparent "confirmation" of the cancelling 500-600 TMT of South American soybean purchases yesterday was only the tip of the iceberg, unsettled the market. The Commitment of Traders report shows fund money shedding around 15,000 of their near record long position in soybeans for the week through to Tuesday night. Even so, they still hold a hefty long position of over 192k contracts. Goldman Sachs estimated the US 2014 bean acreage at 81.0 million, versus Allendale's suggested 83.2 million, the USDA's Outlook Forum figure of 79.5 million and 76.5 million a year ago. The NOPA February crush report comes out on Monday, with the trade expecting a figure of around 140.9 million bushels. In January the crush was 156.943 million and in February last year it was 136.322 million. Brazil is forecast mostly dry over the weekend, whilst scattered rains and thunderstorms are in the forecast for Argentina. Funds were estimated to have been net sellers of around 3-4,000 soybean contracts on the day. Mar 14 Soybeans closed at $13.76, down 14 3/4 cents; May 14 Soybeans closed at $13.88 1/2, down 7 3/4 cents; Mar 14 Soybean Meal closed at $449.00, down $0.60; Mar 14 Soybean Oil closed at 42.02, down 75 points. For the week that puts Mar 14 beans down over 80 cents, with meal down $16.00 and oil shedding more than 200 points.

Corn: The corn market closed generally a cent or two higher, with the exception of the expiring front month Mar 14, which crashed 12 cents lower. Massive fund buying continues to support corn, with today's Commitment of Traders report showing them adding more than 50k lots to their relatively new long-holding, to add to the more than 70k that they bought the previous week. They are now net long of almost 210k lots. The spec community clearly feel that if the Ukraine crisis is going to affect anything, then it's more likely to be unplanted corn. The country also still has around 3 MMT of corn left to ship in 2013/14. Ukraine's grain stocks as of March 1 were said to be 16.2 MMT, up 23 percent on a year ago. Ukraine ports, except those in Crimea, are said to still be functioning more or less as normal. The USDA attaché in Japan estimated the country's 2014/15 corn imports at 16.0 MMT versus 15.5 MMT in 2013/14. Goldman Sachs estimated the US 2014 corn acreage at 93.5 million versus Allendale's 92.349 million from yesterday, the USDA Outlook Forum figure of 92.0 million and the 95.4 million planted a year ago. Informa's US acreage estimates come out next week. The USDA will issue theirs at the end of the month. A dry weekend in Brazil should aid the soybean harvest and safrinha corn planting. There's talk that Argentine port workers may strike next week. Oman bought 20,000 MT of Argentine corn for May/June shipment yesterday. Low prices mean that many EU countries such as Romania, France and Poland will cut their corn area this year, according to a report on Reuters. Mar 14 Corn closed at $4.72 1/4, down 12 cents; May 14 Corn closed at $4.86, up 1 cent. For the week, Mar 14 corn fell 8 3/4 cents, with May 14 down 3 cents.

Wheat: The wheat market regained it's mojo, generally closing with gains of 10-14 cents on the day. Estonia’s President added some fuel to the fire after he was quoted as saying that Big Bad Vlad plans to invade Ukraine. He may well be right too. Whilst the country plants very little spring wheat (which contributes around 5% of the national crop), the crisis is seen having a negative impact on the usage of inputs and therefore potentially cutting winter wheat yields. Fund money has also been busy coming into the wheat pit in the past week, with the latest Commitment of Traders report showing them flipping to a net long position of around 10,500 contracts in Chicago wheat from a short of around 6,000 a week previously. They've also been adding to their net long in Kansas and Minneapolis wheat, with Benson Quinn Commodities saying that their long holding in the latter is the highest since late 2011. Fund money was estimated as adding further 5,000 CBOT wheat contracts to it's new long-holding today. In addition to Ukraine, the market is fretting over US wheat conditions. "Drought has worsened in Texas and Oklahoma this winter - two of the top US bread-wheat states. Very dry conditions are beginning to creep into southern Kansas as well," said Martell Crop Projections. "It has been the coldest Midwest winter in decades causing deep penetrating frost that threatens to delay corn- and spring wheat planting. Strong warming with sunshine would be most desirable to melt snow and begin warming frozen fields. However, the temperature outlook is still threatening below-average temperatures in the majority of corn belt," they added. Oman bought 40 TMT of Australian wheat, 20 TMT of Canadian wheat and 20 TMT of Argentine barley for May/June shipment yesterday. Mar 14 CBOT Wheat closed at $6.90 1/4, up 11 1/4 cents; Mar 14 KCBT Wheat closed at $7.44, up 13 3/4 cents; Mar 14 MGEX Wheat closed at $7.51, unchanged. All these contracts went off the board today. For the week CBOT wheat added 44 cents, with Kansas putting on 28 3/4 cents and Minneapolis losing a cent.

14/03/14 -- EU grains closed mixed on the day, and mixed for the week, with Mar 14 London wheat unchanged at GBP166.80/tonne, whilst new crop Nov 14 was GBP0.50/tonne lower at GBP159.35/tonne. May 14 Paris wheat closed unchanged at EUR211.50/tonne, Jun 14 Paris corn was up EUR0.50/tonne to EUR186.25/tonne and May 14 Paris rapeseed rose EUR2.00/tonne to EUR402.50/tonne.

The trade is uncertain whether the recent price spike is fully justified by the problems between Russia and Ukraine, or whether things may have got overdone. Certainly there's been a flood of fund money pouring into the sector in recent weeks, which has contributed to this latest rally.

Tonight's Commitment of Traders report shows fund money in Chicago wheat is now sitting on a net long of more than 10,000 contracts (versus a short of around 6,000 last week) as of Tuesday night. They are also now net long more than 200,000 lots in corn, and approaching that number in soybeans.

A big weekend looms in Ukraine, with Crimea looking almost certain to vote in favour of going back to being part of Russia, whether the West say it's legal or not. Ousted Ukraine pro-Russian President, Viktor Yanukovych, won around 82% of the Crimean vote back in the 2010 elections.

The question to ask after that is what comes next? Violence has now spread to other parts of the the country, including Donetsk (where Yanukovych won more than 96% of the 2010 vote) and Kharkiv (around 70%). The Russian Foreign Ministry said today that they "reserved the right to take (Russian) people under it's protection" in these regions, which sounds like staging a repeat performance of what happened in Crimea a couple of weeks ago.

If Putin stops at Crimea, then the real impact on world grain markets should be minimal, and the 20% rise in the price of wheat that we've seen in Chicago since the Russian invasion took place is indeed an over-reaction.

If not then we might see Ukraine, almost literally, ripped in half. A glance at this map Ukraine shows the clear split between the pro-European and pro-Russian parties at the last election, and where wheat and corn are grown. Note that Russia re-taking the pro-Russian east and south would also conveniently give then full control of the Black Sea ports, and divide the arable land area up almost in half. What's left of Ukraine would be land-locked.

Meanwhile, early spring planting in Ukraine goes on, amidst all the uncertainty. Planting has been completed on around 306k hectares, about 11% of the planned early spring area (which excludes corn and sunflowers), made up mostly of barley (221k ha).

Ukraine agronomist Mike Lee tells me that "Winter crops are looking well, spring has arrived early and as each day goes by the risk of frost damage diminishes. It is dry, very little snow this winter meant there has been very little snow melt to recharge soils. On top of that we have not had much rain. At this stage it is starting to impact on shallower rooted cereals with deeper rooted oilseed rape still OK. I expect we will see rain soon as the weather usually balances the budget so I don't anticipate any problems come planting in April and May."

"Cash is in short supply and credit terms are becoming tighter so I see plantings being down and what is planted receiving less inputs, particularly fertiliser," he adds.

In other news, spring also appears to have arrived early in Europe, and fieldwork is active. FranceAgriMer said that 99% of the French winter wheat crop is tellering versus 90% this time last year. They said that 19% of the crop has an ear of at least 1cm versus only 2% a year ago. Winter wheat rated good/very good was pegged at 75%, up a point on a week ago, and versus 67% a year ago.

French winter barley rated good/very good was unchanged on a week ago at 71%. Spring barley plantings are ony 20% done versus 52% this time last year.

Agrimoney reported that the weaker pound versus the euro this week allowed UK feed wheat to trade into the near continent.

Ensus are said to be taking scheduled down-time after trialling a 70:30 corn/barley mix with zero wheat inclusion.

13/03/14 -- Soycomplex: Beans closed higher, aided by weekly export sales of 113,500 MT of old crop and 776,900 MT of new crop, which beat trade expectations for a combined 350-700 TMT. Actual exports themselves are slowing, but boy do they need to. At 863,200 MT they were down 27 percent from the previous week and 40 percent from the prior 4-week average. The primary destination was unsurprisingly China at 389,500 MT. The US has now shipped 38 MMT of soybeans so far this season, and has another 6.2 MMT on the books waiting to go. That equals 106% of the USDA's target of 41.64 MMT for the entire season. Reuters reported that China had cancelled 5-600 TMT of South American soybeans booked for Mar-May shipment, seemingly confirming recent rumours. "They have washed out 10 panamax cargoes and want to cancel 30 more," an un-named Singapore-based trader was quoted as saying. There is no way of knowing how accurate these figures are though. What the trade does know is that very little in the way of US soybean purchases have been cancelled, and this is maybe where the direction of prices hinges from here. Safras cut their Brazilian soybean production forecast from 91.8 MMT to 86.1 MMT. Dr Cordonnier said that the soybean harvest in Brazil's Mato Grosso is approaching 75% done. Somar say that the 5-year average for the state is only 60% at this time. So much for the harvest being delayed by rains. MDA CropCast cut their forecast for Brazil by 2.16 MMT from last week to 86.37 MMT, due to late season wetness in the north west of the country. They also trimmed Paraguay by 0.53 MMT to 8.19 MMT. Allendale forecast that US farmers will plant a record 83.212 million acres this spring. That's a hefty near 6.7 million, or 8.7%, more than last year's 76.533 million and massively above the USDA's February Outlook Forum forecast of 79.5 million. Mar 14 Soybeans closed at $13.90 3/4, up 9 cents; May 14 Soybeans closed at $13.96 1/4, up 9 1/4 cents; Mar 14 Soybean Meal closed at $449.60, up $1.30; Mar 14 Soybean Oil closed at 42.77, down 43 points.

Corn: The corn market was mostly a little lower. Weekly export sales of 683,400 MT of old crop and 103,600 MT of new crop were in line with expectations of a combined 700 TMT to 1 MMT, but not greatly so. The old crop sales were were down 55 percent from the previous week and 37 percent from the prior 4-week average. Exports of 907,400 MT were down 20 percent from the previous week. Shipments this season now stand at 19.2 MMT, with outstanding sales of a further almost 19 MMT, taking total commitments to 38.2 MMT which is nearly 91% of the USDA's target of 42 MMT for the season. Note though that unlike in the case of soybeans, a large proportion of these commitments are still unshipped. Unshipped sales is just stock. Safras cut their Brazilian corn production estimate from 75.6 MMT to 71.2 MMT. Dr Cordonnier estimated that Mato Grosso safrinha corn is more than 90% sown, and said that plantings could be wrapped up by the end of the week. Russia said that they'd exported 422 TMT of corn in February, almost three times the volume shipped out twelve months previously. The traditional home for US corn of South Korea was the main recipient. Allendale forecast that US farmers would plant 92.349 million acres of corn this spring. That's a drop of more than 3% on last year's 95.365 million, although slightly higher than the USDA's February Outlook Forum estimate of 92 million. Funds were given credit for being net sellers of around 6,000 corn contracts on the day. The big question as to where we go from here maybe depends on whether they are now prepared to add to their newly established corn long, or if they feel that they may have over egged the pudding a bit too quickly in relation to the "crisis" in Ukraine. The USDA are playing down the effect that this is having on spring planting potential, saying that normal lines of credit are available to allow farmers to purchase seed, and that there is presently no shortage of it (or indeed other inputs). Mar 14 Corn closed at $4.84 1/4, unchanged; May 14 Corn closed at $4.85, down 3 1/2 cents.

Wheat: The wheat market had a very choppy day, trading with both double digit gains and losses through the day/night session. Mar 14 CBOT wheat traded at $7/bushel for the first time for a front month since last October during the overnight session, but couldn't hold onto those gains in daytime open outcry trade. All Mar 14 contracts go off the board tomorrow, so further erratic trade in those might be anticipated. Other months generally closed with losses of around 10-12 cents on the day across the three exchanges though. Weekly export sales of 476,900 MT of old crop and 89,200 MT of new crop were unspectacular, although in line with expectations. Maybe this indicates that the world doesn't want US wheat as badly as fund money has done recently? Again, they key to where we go from here might be spec money's willingness, or lack of it, to continue to buy US wheat like it's going out of fashion. On wag on Twitter said something like "wheat, one minute it's in the 70's, the 80's the 90's and then the 70's again. A bit like my haircut." It was that sort of a day. "While the posturing over Crimea continues to intensify with threats of sanctions from the west and Russian military exercises along the Ukrainian border, the major US media is more concerned about the missing plane at the moment. Many participants may be waiting for reaction to this weekend’s vote in Crimea before making their next move," Benson Quinn Commodities sagely observed. Kazakh wheat was said to be the lowest offer in a Lebanese tender for 25,000 MT of optional origin milling wheat for arrival by April 7 at the latest. Allendale estimated the US all wheat area at 55.324 million acres, versus the USDA's Outlook Forum forecast of 55.5 million and the 56.2 million planted last year. Mar 14 CBOT Wheat closed at $6.79, down 9 cents; Mar 14 KCBT Wheat closed at $7.30 1/4, down 11 cents; Mar 14 MGEX Wheat closed at $7.51, unchanged.

13/03/14 -- EU grains closed mixed in choppy two-sided trade. Support came from the overnight Globex wheat market trading at $7/bushel for the first time for a front month since October. May 14 Paris wheat meanwhile hit EUR216/tonne - the best level for a front month since last May - before giving up all of the day's gains, and then some, by the close.

Today's overnight high in Chicago wheat represents a more than 20% jump on where the market closed immediately prior to the Russian invasion of Crimea just a couple of weeks ago.

The day ended with Mar 14 London wheat GBP0.20/tonne lower at GBP166.80/tonne, and with new crop Nov 14 London wheat closing GBP0.55/tonne firmer at GBP159.85/tonne. May 14 Paris wheat closed EUR2.00/tonne lower at EUR211.50/tonne, Jun 14 Paris corn was up EUR0.50/tonne to EUR186.25/tonne, whilst May 14 Paris rapeseed fell EUR2.50/tonne to close at EUR400.50/tonne, whilst other months were unchanged.

"Wheat rallies to 4-month high on Ukraine supply concerns," was typical of many of the headlines around this morning, but has the market gone up too far, too soon, and without sufficient fundamental reason?

It looks that way as far as the USDA are concerned. In a special report into current conditions in one of the world's leading wheat and corn exporting nations, they said that "prospects for Ukraine's winter crops and spring-sowing campaign remain generally favourable."

"The country’s wheat crop is already in the ground, and the availability of most inputs for spring sowing (including fuel, fertilizer, seed, and credit) has not been interrupted," they said. However "the use of certain imported inputs, specifically plant-protection chemicals and hybrid seed, could decrease from last year's level if Ukraine’s currency exchange rate does not improve within the next few months," they added.

Winter wheat was planted on 6.3 million hectares, down about 5 percent from last season, but winter losses have been below average, they noted. This has also been observed by other commentators, with some suggesting that one will offset the other, and that wheat production in 2014 may therefore be broadly similar that year ago levels.

"Spring planting is underway but will not be in full swing until later in March," they said. This begins with spring barley and some spring wheat (which only accounts for around 5% of the nation's total wheat output), plus oats and pulses, before progressing onto corn, sunflowers etc in late April.

"Access to the standard sources of agricultural credit for Ukrainian agricultural enterprises has not been impeded," they said. "Seed companies report that sales are proceeding as usual, and fertilizer and fuel are being delivered on time as well," they added.

"Escalating prices for imports, resulting from a decline in the exchange rate for the Ukrainian hryvna, could have an impact on the purchase of some key agricultural inputs, including hybrid seed and plant-protection chemicals," they conceded. Although they also noted that "seed companies report that the majority of seed for this year's spring crops has already been imported" and that "chemical companies have not yet reported a significant decrease in the importation of products to date."

The Crimea region typically produces around 5% of the nation's wheat crop (presumably most, if not all of which is already in the ground), and only minimal amounts of corn. That tonnage may simply be Russian wheat, not Ukraine wheat, by the time they get around to harvesting it. Yields may be lower due to reduced inputs, but does say a 20% drop on 5% of Ukraine's wheat crop justify a 20% rise in world prices? Based on last year's national production, we are talking about a figure of around 200-250 TMT being in jeopardy here.

"Poultry production is Crimea's largest industry, and the territory accounts for 6.5 percent of Ukraine's total poultry output, along with 3.1 percent of the beef, and 2.5 percent of the pork," the USDA added. The market doesn't yet seem to have paused to consider that the current crisis may have a more negative impact on domestic feed demand than it will on grain exports.

In other news, Russia's Stats Office reported that they'd shipped 422 TMT of corn in February, almost three times the volume exported in the same month in 2013. South Korea was the top home, but even the UK got a look in as a featured buyer, the first such sale in more than a year.

The German Farm Cooperatives Association, DRV, estimated the 2014 wheat crop at 24.64 MMT, a 1.8% fall on last year. "Following the continued mild weather with only one strong period of frost in most of Germany, grain plants have come through the winter period without significant damage," they said. They estimated that growth is 3-4 weeks ahead of normal.

They forecast the 2014 German rapeseed crop at 5.57 MMT, a 3.2% fall versus last year due to reduced yields and a lower acreage. Corn production will rise 6.7% to 4.79 MMT, winter barley output will increase 0.6% to 8.45 MMT and the spring barley crop will be 7.8% higher at 2.11 MMT, they said.

12/03/14 -- Soycomplex: Beans fell sharply on what one observer called "negative macro economic vibes" - which is short-code for "nothing specific". That said, they did at least manage to close well off session and overnight lows with the nears having been down well over 40 cents at one point. There's some pretty widespread talk/gossip that China may be looking to wash out as many as 30 Brazilian soybean cargoes, let alone purchases from the US. They may even be offering some of these Brazilian cargoes to the US, according to some. We will have to wait and see how much truth is in these rumours. At least one major northern Chinese port was reported to have stopped discharging beans last week as it was already full to capacity. The enormity of the speculative fund long position in soybeans was always going to leave the market vulnerable to a significant downside correction once any sell-off built up a head of steam, and not necessarily for anything more than "negative macro economics" and/or Chinese rumour reasons. In other news, Brazil's CONAB estimated the soybean crop there at 85.4 MMT, a sharp drop on the 90 MMT forecast previously. That's still a record, but a long was off some of the trade estimates around January of around 92 MMT. Too much rain in the north, and heat and dryness in the south of the country were the reasons given. CONAB also cut their estimate for Brazilian soybean exports from 47.7 MMT to 45.3 MMT. US hog prices hit new all-time highs again this week, on thoughts that the ongoing PEDV epidemic would sharply reduce pig numbers this year, potentially cutting feed demand for meal. Trade estimates for tomorrow's weekly export sales report for beans are 350-700 TMT. Mar 14 Soybeans closed at $13.81 3/4, down 29 3/4 cents; May 14 Soybeans closed at $13.87, down 26 cents; Mar 14 Soybean Meal closed at $448.30, down $4.00; Mar 14 Soybean Oil closed at 43.20, down 31 points.

Corn: The corn market closed around 5 to 6 cents higher on further fund buying (estimated at around 9,000 contracts on the day). Spillover support from resurgent wheat was probably also a factor. The Ukraine Ag Minister said that spring grain planting in Crimea would be minimal due to a problem distributing fuel to the region. That got some excited, although Reuters reported that Crimea only accounted for 1.2% of Ukraine's 63 MMT grain crop in 2013. It would be a problem if it started affecting a more widespread area of the country though, but for now spring plantings are off to a timely start, although what they've planted so far is only a drop in the ocean compared to the more than 8 million ha that is/was originally expected to be sown. The situation certainly wants monitoring. Ukraine's corn exports (around 480 TMT shipped last week) so far also appear to be proceeding largely unhindered, although this too wants keeping an eye on. CONAB cut their forecast for the Brazilian corn crop only relatively modestly, from 75.5 MMT to 75.2 MMT, which is still well above the USDA's 70 MMT forecast from Monday. They are banking on a much larger "safrinha" corn crop from Brazilian growers than the USDA it would seem. Planting of that is underway now. US ethanol production for the past week was only 869,000 barrels/day, down from 894,000 bpd the week previously and well below the more than 930,000 bpd required to hit the USDA's target for the season. Israel bought 50 TMT of optional origin corn in a tender. There was some speculation that this would have normally been sourced from Ukraine, but that this consignment will now most likely come from the US due to the current tensions in the Black Sea region. Trade estimates for tomorrow's weekly USDA export sales report are around the 700 TMT to 1 MMT mark. Mar 14 Corn closed at $4.84 1/4, up 6 1/4 cents; May 14 Corn closed at $4.88 1/2, up 5 1/4 cents.

Wheat: The wheat market closed sharply higher, with the exception of the extremely thin front month in Minneapolis. The North American Millers Association forecast the 2014 US soft red winter wheat crop at 437.0 million bushels, down 23% from the 564.9 million harvested in 2013. Continuing problems with rail logistics in Canada saw front month and in delivery (and therefore limitless) Mar 14 oats close almost 80 cents higher - almost four times the daily limit move, with the next two positions of May and Jul 14 closing locked in up 20 cents. This is adding spillover support to wheat, and so too is fund buying as they unwind long beans/short wheat spreads. The US and Canada remain very cold, prompting some to already discuss later than usual spring plantings, and therefore the possibility for reduced yields. "Very severe drought has also developed in the US Southwest expanding into the Plains and damaging hard red winter wheat in the Southern Great Plains. Oklahoma and Texas have received 15-40% normal rainfall over the past 11-12 weeks, the number 2 and 3 top bread states," said Martell Crop Projections. The stand-off between Russia and Ukraine is also adding support to the market, even if it did prompt Russia's Ag Ministry to today up their 2013/14 grain export forecast by 2 MMT to 22 MMT. Morocco were said to have bought up to 400,000 MT of milling wheat from various origins, including Russia and Ukraine, last week. Israel were said to have bought 25,000 MT of feed wheat, said to be most likely of Russian/Ukraine origin too. There's some debate that some Middle Eastern buyers will shy away from booking business with Ukraine just at the moment, but others may see it as an opportunity to simply bid a little lower. The recent price hikes that we've seen in the market aren't all being fully reflected in US cash prices, much to the disenchantment of some, it is reported. Tomorrow's weekly export sales are estimated at around 350-750 TMT. Mar 14 CBOT Wheat closed at $6.88, up 24 3/4 cents; Mar 14 KCBT Wheat closed at $7.41 1/4, up 19 1/4 cents; Mar 14 MGEX Wheat closed at $7.51, unchanged.

12/03/14 -- EU grains finished mostly higher on the day, with the exception of rapeseed which fell sharply as US soybean/meal futures caved in. Wheat figured in two-sided trade, but the bulls won the day as fund/spec money continues to flood into the market sniffing the chance of an easy buck. Fund money meanwhile is diving out of a near record long in soybeans.

Mar 14 London wheat ended the day GBP2.25/tonne higher at GBP167.00/tonne, and with new crop Nov 14 GBP2.60/tonne firmer at GBP159.50/tonne. May 14 Paris milling wheat rose EUR3.25/tonne to EUR213.50/tonne, Jun 14 Paris corn was EUR2.50/tonne firmer at EUR185.75/tonne and May 14 Paris rapeseed fell EUR7.25/tonne to EUR403.00/tonne.

"Wheat futures continue to defy any sense of negativity from a technical and fundamental standpoint. The Agriculture Minister for Ukraine suggested that the major area for spring grains could remain unplanted due to fuel shortages," said one market observer. Yet, the area referred to - Crimea - accounted for an almost insignificant (1.2%) of Ukraine's total net grain output in 2013.

We are in (literally) blind panic mode here. London wheat has shot up over 7% since Russia helped itself to Crimea at the end of February, with Paris wheat up 6% and Paris corn up by almost 10% during the same period. Yet there is no evidence whatsoever at this stage that Ukraine's grain exports or spring plantings have slowed by any significant degree at all. The $6 million question is does this provide a Putin-given selling opportunity, or is this a major reversal of direction in the grain markets?

Ukrainian farmers have already planted 106,000 hectares of spring grains this year. Winter grains are rated 93% good to satisfactory. Russia has planted 65,800 ha of spring grains. The Agriculture of Ministry in Russia indicated that 96% of the winter grain crop planted there is in good to satisfactory condition for this year. Both are above the average ratings for this time of year.

The Russian Ag Ministry today revised their forecast for 2013/14 grain exports up from 20 MMT to 22 MMT, citing Ukraine "uncertainty" and the weak rouble.

FranceAgriMer cut their forecast for 2013/14 French soft wheat exports from 18.41 MMT to 18.19 MMT, and raised ending stocks from 2.85 MMT to 3.17 MMT.

The USDA's FAS pegged the Indian 2014/15 wheat crop at a record 96 MMT versus 93.1 MMT last year.

The HGCA said yesterday that UK winter grain crops are largely in good condition, given some notable exceptions in the badly flooded areas.

That all points to lower prices down the line, not firmer ones, but as has been proven many times before, the power of fund money should never be under-estimated. They can make things happen that shouldn't really happen.

A prudent course of action would probably be to have a fair proportion of your 2014/15 crop forward sold at this point if you are a producer. If you are a buyer, then again a fair degree of forward cover is perhaps advisable.

Consider that a Reuters poll earlier in the year gave a potential upside to CBOT wheat of $8.50/bushel at the turn of the year, more than 23% higher than last night's close on the Mar 15 future, which will be the front-month then. The downside was $4.75/bushel, 31% below last night's close.

11/03/14 -- Soycomplex: Beans ended the day mixed, lower on the nears and higher on new crop. The very large spec long, which is approaching record levels, is seen leaving the market vulnerable to a significant downside correction even if the supply and demand fundamentals continue to lean bullish. Once again Chinese cancellations were not forthcoming today, prompting Goldman Sachs to say that "the US is running out of soybeans". They forecast US 2013/14 soybean ending stocks at 139 million bushels versus the USDA's 145 million of yesterday. Having had time to digest yesterday's USDA report in detail, fresh news today was scarce. The trade is keeping an eye on developments in Ukraine, with the EU, US, IMF and World Bank all seemingly in the frame to extend them some credit. They've exported just over 3 MMT of oilseeds so far this season, including 2.07 MMT of rapeseed and 0.96 MMT of soybeans. Mar 14 Soybeans closed at $14.11 1/2, down 7 3/4 cents; May 14 Soybeans closed at $14.13, down 5 3/4 cents; Mar 14 Soybean Meal closed at $452.30, down $0.40; Mar 14 Soybean Oil closed at 43.51, down 13 points.

Corn: The corn market closed around 4 to 6 cents higher on the day, with fund money stepping in for an estimated 8-10,000 corn contracts. As with soybeans, after yesterday's deluge of USDA today, today was a no news sort of a day. Agritel reported that Ukraine had shipped 480 TMT of corn last week, indicating that the current problems with Russia haven't yet made much of an impact on grain exports. Year-to-date Ukraine exports now stand at almost 25 MMT, including more than 15 MMT of corn. Early spring grain planting is underway in both Ukraine and Russia, aided by unusually mild weather. Trade speculation ponders whether Ukraine farmers will plant as much spring grain as the 8.6 million acres that the government say that they will. Ukraine's Ag Minister said that little arable land in Crimea will probably get sown this spring due to a lack of fuel. The region is not a major grain producer though, accounting for only 765 TMT of the country's 63 MMT harvest in 2013. Separately, the Ukraine Ministry increased their forecast for 2013/14 grain exports from 32.5 MMT to a new record 33 MMT. South Korea passed on a tender to import 60 TMT of optional origin corn. Mar 14 Corn closed at $4.78, up 6 cents; May 14 Corn closed at $4.83 1/4, up 5 cents.

Wheat: The wheat market jumped around 15-20 cents (if we ignore the soon to expire nearby positions) across the three exchanges on fund buying/further short covering. They were estimated to have been net buyers of around 4,000 Chicago wheat contracts on the day, and almost certainly now sit on a net long in CBOT wheat for the first time in more than a year. The market might be getting a little ahead of itself. "There was talk that fuel shortages will limit the ability to plant spring crops in Crimea, which may end up being the case, but is no reason to pay 25 cents higher for wheat," said Benson Quinn Commodities. How true, when you consider that Crimea only produced 1.2% of Ukraine's 2013 grain crop. Concerns remain for US winter wheat. "Winter precipitation in the US breadbasket, the 7 leading states, has amounted to only 1.55 inch, compared to 3.34 inches normally," said Martell Crop Projections. Despite a sharp decline in wheat condition ratings across the winter, these are still significantly better than they were a year ago mind. Meanwhile crops in Europe and the FSU are generally in good health. Mar 14 CBOT Wheat closed at $6.63 1/4, up 18 1/4 cents; Mar 14 KCBT Wheat closed at $7.22, up 17 1/4 cents; Mar 14 MGEX Wheat closed at $7.51, up 5 cents.

Spec buying continues to push the market higher. How long this will last is anybodies guess, but this is the casino type environment that we are in at the moment.

Ukraine is getting inundated with offers of financial assistance, including a mooted $15 billion loan from the EU, a $3 billion credit line from the World Bank and a US Senate aid package proposal which is said to include IMF funding.

I'm sure that they will gratefully accept it all, but will we ever see them again?

Agritel said that Ukraine had exported 480 TMT of corn last week, so there's little sign of a slow down there. They've shipped 24.9 MMT of grains (to Mar 7) so far this season, including 15.12 MMT of corn. At that rate they will hit the USDA's corn export target for the season of 18.5 MMT in seven weeks. They've also shipped 7.44 MMT of wheat and 2.14 MMT of barley so far this season.

In addition, Ukraine has exported over 3 MMT of oilseeds so far this season, including more than 2 MMT of rapeseed.

Trade reports suggest that Ukraine 11.5% milling wheat traded at $276/tonne FOB for April shipment today, with corn for May delivery trading at $236.50/tonne.

Morocco bought 260 TMT of wheat on the domestic market in their tender.

In the UK, the HGCA said that "good conditions in the autumn allowed winter drilled crops to establish well and start tillering early. This left crops in a good position going into winter and there are few crops outside the main flooded areas that are of questionable viability, despite the high rainfall across the country."

"The wet weather over the period mid-December through to February has delayed the start of spring crop drilling, although, typically, less than 5% of the area is usually drilled by the end of February. Spring barley drilling has now started on lighter soils in the east of England, with cultivations and drilling a priority as soon as soil conditions allow. Given the increase in winter cropping, spring crop areas are likely to be much lower than in 2013, although positive experiences with spring cropping on heavy land has encouraged more farmers to include spring crops in rotations as part of their black-grass management strategy," they said.

"Given the increase in winter cropping, spring crop areas are likely to be much lower than in 2013, although positive experiences with spring cropping on heavy land has encouraged more farmers to include spring crops in rotations as part of their black-grass management strategy," they added.

10/03/14 -- Soycomplex: Beans closed sharply lower, with front end months showing the biggest declines, with funds dumping an estimated 14,000 of their length - simply a volume that the market was unable to comfortably absorb. Talk of Chinese cancellations abound, although there was no official confirmation of any today. The USDA increased their 2013/14 US soybean export forecast only a little from 41.1 MMT to 41.64 MMT. That's versus existing commitments of 44.2 MMT, of which 37.2 MMT has already been shipped. Brazil's crop was trimmed from 90 MMT to 88.5 MMT, putting the USDA in line with other trade estimates. Argentina was left unchanged at 54 MMT. Brazil and Argentina's soybean export potential was also left unchanged at 45 MMT and 8 MMT respectively. World soybean ending stocks were cut from 73 MMT last month to 70.64 MMT this time round, which was below the average trade guess of 71.5 MMT. US ending stocks this season were cut from 150 million bushels to 145 million, which was a little less than the market expected. "For the most part, these aren’t numbers that scream sell on the old crop, but given the strong move of the last couple of months, the spec trade got ahead of itself," said Benson Quinn Commodities. I'd tend to agree with them. Net cancellations of over 2.5 MMT, and no further sales whatsoever for the rest of the season are what's needed to eek out US soybean stocks through to new crop. Mar 14 Soybeans closed at $14.19 1/4, down 38 1/4 cents; May 14 Soybeans closed at $14.18 3/4, down 39 cents; Mar 14 Soybean Meal closed at $452.70, down $12.30; Mar 14 Soybean Oil closed at 43.64, down 45 points.

Corn: The corn market stumbled around 10 cents lower on what looks like buy the rumour, sell the fact trade. Funds were judged to have been net sellers of around 14,000 corn contracts on the day, despite the USDA cutting US corn ending stocks by 25 million bushels to 1.456 billion, versus trade expectations of a small increase to 1.488 billion. US corn exports were raised 1 MMT to 42 MMT. Brazil's and Argentina's production and exports were left unchanged from last month. The EU-28 was seen importing 0.5 MMT more corn than forecast last month as it continues to displace wheat in feed rations. Global corn ending stocks were raised by almost 1.2 MMT to nearly 158.5 MMT, which was over 2 MMT above the average trade guess. Weekly export inspections were reported at 933,974 MT, which is slightly above the level required to hit the USDA target for the season. Texas corn was said to be 10% planted versus 8% a week ago and 18% normally at this time. News over the weekend that Russian troops had reportedly taking control of a Ukrainian border guard post in Western Crimea could rekindle some supply side fears from the region again. The USDA didn't make any alteration to their forecast for Ukraine corn exports of 18.5 MMT in 2013/14. Russia's corn exports were also left unchanged at 3 MMT, whilst Europe's were dropped 0.5 MMT to 2 MMT. Mar 14 Corn closed at $4.72, down 9 cents; May 14 Corn closed at $4.78 1/4, down 10 3/4 cents.

Wheat: The wheat market finished down anywhere from a cent to over thirteen cents across the three exchanges. The USDA left US wheat ending stocks unchanged from last month at 558 million bushels, compared to trade expectations of a small increase to 570 million. World ending stocks came in virtually unchanged at 183.8 MMT, which was in line with expectations. Not a lot to get excited about there. The 2013/14 world wheat crop was increased from 711.9 MMT to a new record 712.7 MMT. Australia's crop was increased by 0.5 MMT and India's by around 1 MMT. World consumption was increased by just under 1 MMT to 704.8 MMT. Algeria, Iran, Iraq, Morocco and Turkey were all seen importing more wheat in 2013/14 than was forecast last month, in amounts ranging from 200 TMT to 1 MMT in the case of Iran. Weekly US wheat export inspections came in at a disappointing 429,081 MT, compared to the 609,867 MT inspected last week, and the 780,887 MT inspected during the same week last year. The trade continues to monitor US winter wheat crops on the Plains which have all demonstrated a significant deterioration in conditions over the winter. Texas wheat was rated 28% good/excellent today. Mar 14 CBOT Wheat closed at $6.45, down 1 1/4 cents; Mar 14 KCBT Wheat closed at $7.04 3/4, down 10 1/2 cents; Mar 14 MGEX Wheat closed at $7.46, down 6 cents.

10/03/14 -- EU grains closed lower, in consolidation from the recent rally ahead of this afternoon's USDA March WASDE report, and disappointment after Chinese manufacturing data came in much weaker than expected. Other news was thin on the ground.

The day ended with Mar 14 London wheat GBP1.20/tonne lower at GBP163.45/tonne, and with new crop Nov 14 London wheat closing GBP1.05/tonne easier at GBP154.70/tonne. Mar 14 Paris wheat went of the board EUR6.75/tonne lower at EUR208.50/tonne, Jun 14 Paris corn was down EUR1.50/tonne to EUR182.50/tonne, whilst May 14 Paris rapeseed fell EUR2.75/tonne to close at EUR409.00/tonne, whilst other months posted double digit losses.

In the end, the USDA report didn't really tell us anything that we didn't know already. "Global wheat trade is forecast at a record and the EU is in the best position to benefit from the expansion with its freight and logistical advantages to markets in the Middle East and North Africa," they said.

"In addition, supplies are abundant as a result of resurgent production and less use in feed rations. EU corn supplies are plentiful on account of a large crop and another year of sizeable imports. Low corn prices are driving a shift from wheat to corn in feed rations, freeing up more wheat for export," they added.

They increased the size of EU-28 wheat exports by 1.5 MMT to a record 29 MMT, noting that "export licenses of nearly 2.7 MMT in the last 4 weeks reflect continued strong sales."

Russia's export potential was increased by 1 MMT to 17.5 MMT "as a result of increased competitiveness evidenced by recent sales to Egypt and Iran."

Australia's 2013/14 wheat crop was increased by 0.5 MMT to 27 MMT, and India's upped by 1 MMT to 93.5 MMT. World wheat ending stocks were virtually unchanged at 183.8 MMT, which was in line with trade expectations.

The EU-28's corn imports in 2013/14 were raised by 0.5 MMT to 11.0 MMT, whilst corn exports were cut by a similar amount to 2 MMT.

Russia continues to makes strategic moves to tighten their grip on the Crimea, which keeps the market nervous.

07/03/14 -- Soycomplex: Beans surged to the best closing levels for a front month since September, and the highest close on nearby Mar 14 ever. Fund money continues to pour into grains, suddenly disenchanted with equities, with the Commitment of Traders report revealing them now sitting on a net long of over 208,000 contracts as of Tuesday night. They were judged to have been further net buyers of around 5,000 contacts today. "Soybean ownership in the western belt continues to struggle with the idea of a higher board as there are very few opportunities offered on the cash side," noted Benson Quinn Commodities. Highlighting that cash prices have failed to keep pace with the rapid rise in the futures market in recent weeks. With a big report coming up from the USDA on Monday, you'd have thought that some profit-taking and consolidation might have been in order at the end of a week where soybeans have increased in price every day, but not a bit of it. The very strong pace of US soybean exports and sales appears to have the market thinking that the USDA has little room to manoeuvre in their well-known capacity to spring a bearish surprise for beans on Monday. With total net sales commitments already at over 107% of the USDA's target for the season, these can only be increased, not reduced surely? Even if there are no more sales (and no more cancellations), the USDA would need to adjust soybean exports higher by 104 million bushels. This would leave ending stocks at only 46 million bushels. That's way below their comfort zone minimum of 150 million. Consider here too that this assumes that the 2012/13 carryout of 141 million was correct - many think that it was less than that - so the volume of beginning stocks that we started 2013/14 with was possibly overstated. Meanwhile the US domestic crush continues to see strong demand, they can hardly cut that surely? On top of that, last month's USDA estimate for a Brazilian soybean crop of 90 MMT is now at the high side of trade estimates, some of which are as low as 85 MMT, so a downwards revision to say 88-89 MMT could be expected. Monday's report sees traders estimating the USDA cutting US 2013/14 soybean ending stocks to 141 million bushels, versus 150 million last month. The USDA attaché in China today estimated their 2014/15 bean imports at a record 72.0 MMT versus 68 MMT this season. Mar 14 Soybeans closed at $14.57 1/2, up 20 cents; May 14 Soybeans closed at $14.57 3/4, up 19 3/4 cents; Mar 14 Soybean Meal closed at $465.00, up $6.60; Mar 14 Soybean Oil closed at 44.09, down 18 points. For the week, nearby beans added 43 1/2 cents, with meal down $2.90 and oil up 257 points.

Corn: The corn market fell a little, heading into the weekend, but still managed to finish at the highest levels on the Mar 14 weekly chart since last September. The latest Commitment of Traders report shows funds adding a very meaty more than 70,000 contracts to their newly acquired net long position in CBOT corn for the week through to Tuesday night. They now sit on a net long of over 158,000 contracts. "The COT report showed the commercial short jumped from 294.4 thousand to 364.4 thousand contracts week over week, a good reflection of the ample amount of producer selling that has occurred throughout the rally," said Benson Quinn Commodities. Again this appears to highlight the fact that this is very much a fund buying led rally. Unlike soybeans, maybe the trading community thinks that the USDA might have a bit more "wiggle room" at their disposal to spring a bearish corn surprise on Monday, hence today's profit-taking and book-squaring? The trade sees US corn ending stocks averaging 1.488 billion bushels on Monday, from within a range of estimates of 1.431-1.656 billion and the February USDA estimate of 1.481 billion. The USDA seems to be in a position to raise exports by 25-50 million bushels, total commitments so far are nearly 92% of the USDA's target for the season which is only halfway through. World corn ending stocks are seen falling around 1 MMT from last month to 156.27 MMT, from within a range of estimates of 154.80-158.40 MMT. The Argentina corn crop has an average estimate of 23.35 MMT versus 24 MMT last month. The Brazilian corn crop is seen at 69.03 MMT versus 70 MMT in February. CONAB's Brazilian crop estimates come out on 12 March. Heavy and unwanted rains are in the forecast for this weekend in Mato Grosso, Brazil, with up to 3 inches with 90% coverage. That should further hamper the soybean harvest and getting the remainder of the "safrinha" corn crop into the ground. The Buenos Aires Grains Exchange said that the corn harvest in Argentina is 2% done versus 8.4% a year ago. Mar 14 Corn closed at $4.81, down 4 3/4 cents; May 14 Corn closed at $4.89, down 2 cents. For the week Mar 14 corn was 23 1/2 cents higher.

Wheat: The wheat market closed around 4-10 cents higher on the day, with the erratic front month Mar 14 Minneapolis wheat displaying the most strength in very thin trade. The Commitment of Traders report shows fund money continuing to slash their Chicago wheat short, which now stood at only 6,000 lots as of Tuesday night. Monday's USDA report is likely to be more about corn and soybeans than it is for wheat. Trade estimates for US 2013/14 wheat ending stocks are averaging 570 million bushels, from within a range of estimates of 549–615 million and the February USDA estimate of 558 million. For world wheat ending stocks the average estimate is 183.65 MMT, from within a range of estimates of 182.10–185.00 MMT and the February USDA estimate of 183.73 MMT. Paris wheat futures jumped to the best levels since last May on ideas that the situation in the Black Sea might encourage further EU wheat exports. These are already running at 20.8 MMT versus 13.7 MMT a year ago for soft wheat. Reuters report that the southern Crimea region will vote on March 16 on whether to join Russia in a poll condemned by Kiev and the West. Despite grain exports out of Ukraine continuing virtually as normal, there's some speculation that the current tensions, and rapidly falling local currency will encourage "hoarding" of unsold grains as a hedge against inflation, similar to the situation that we've seen in Argentina. There is also some debate as to where some Ukraine farmers will find the money to fund spring plantings and farm inputs such as fertiliser and agrochemicals, potentially harming yields later in the year. Concerns for US winter wheat remain, although despite a sharp deteriorating in good/excellent ratings across the winter, current levels are still significantly better than a year ago. Reuters report that the Canadian government have issued the newly nationalised railways there with a minimum "quota" for the volume of grains they must move per week to clear the huge backlog that exists, or face financial penalties. Mar 14 CBOT Wheat closed at $6.46 1/4, up 4 3/4 cents; Mar 14 KCBT Wheat closed at $7.15 1/4, up 9 cents; Mar 14 MGEX Wheat closed at $7.52, up 10 3/4 cents. For the week, Chicago wheat added 47 1/4 cents, with Kansas up 38 1/4 cents and Minneapolis adding 81 1/4 cents.

07/03/14 -- EU grains finished mostly higher on the day, with the exception of rapeseed, and sharply higher for the week across all commodities on Ukraine uncertainty and a sudden huge rush of speculative money flooding back into the sector.

This was the highest close for a front month on London wheat since before Christmas. It was Paris wheat's best finish since the old crop May 13 contract expired last spring, and similarly Paris corn's highest front month close since the Aug 13 contract went off the board last summer. For Paris rapeseed yesterday's close was the best since last June.

It's interesting how the unforeseen Russian invasion of Crimea, which has a landmass roughly the size of Belgium, could cause such a rapid change of wind direction in the grains market.

In Chicago, fund money had been not just pulling out of wheat, but actively shorting it for well over a year until recently. It had also built up a sizeable short in corn throughout the second half of 2013.

Today's Commitment of Traders report shows fund money reducing their net short in CBOT wheat by over 14,000 lots for the week through to Tuesday night, to hold a net short of just 6,000 contracts. The same community were short more than 100,000 futures and options combined at the end of 2013. For corn, fund money has re-positioned from being short approaching 250,000 contracts last November to now long over 158,000 lots, of which a whopping more than 70,000 was added in the week through to Tuesday night alone.

Note, that these positions are based on Tuesday night, it seems likely that the funds have been further net buyers subsequently too.

Whilst I and others, didn't ever doubt for one minute that fund money had gone away forever, never to return to the grain markets, most of us didn't see it coming back quite so soon. The question now has to be how long is it going to hang around this time? Because you can be sure that something will happen left of field to entice them to fall out of love with the grains sector again, we just don't know what it will be and when it will happen. Welcome to the casino!

Fundamentally nothing that much has changed to justify London wheat now being more than fifteen quid, or 10%, higher than it was at the end of January.

Grain is still moving out of Ukraine, almost unhindered, save with the exception of shipments out of the Crimean port of Sevastopol which require "special permission" to leave (although this is not a major exporting port accounting for only 3.6% of the country's grain exports in February).

Indeed, APK Inform say that grain shipments in February were a record volume for the month at 2.3 MMT, of which 85% (nearly 2 MMT) was corn. Odessa (58%) was the main exporting port, followed by the terminals of the Nikolayev oblast (32.2%), they say.

This takes Jul/Feb grain exports to 24 MMT, versus an APK Inform estimate for full season shipments of 31.7 MMT.

If we ignore the argument that the dispute will harm exports, the other main area of concern is how might it affect production prospects in 2014. Informa Economics this week forecast a Ukraine wheat crop of 20.5 MMT, versus 22.3 MMT last year, with Russia's output declining from 52.1 MMT to 49.5 MMT. Both seemingly on reduced winter plantings, the result of the wet autumn in the region. Kazakhstan's wheat crop however will rise from 13.9 MMT to 16.3 MMT. The net end product being 88.3 MMT of wheat coming out of the three main FSU producing nations later this year, which is only 2 MMT less than last year.

That's hardly a cataclysmic disaster, but when the fund elephants are stampeding around the room it's maybe best to stand to the side and let them get on with it. Note carefully though, that not one ounce of actually real end-user demand is created by fund buying. There are already rumblings of discontent across the Atlantic that the difference between these new sharply higher wheat, corn and soybean futures prices aren't being fully reflected in the cash market.

About Me

Worked in agriculture for over 30 years as a shipper, merchant, trader & broker, but still hasn't got the faintest idea what he's talking about.
Likes beer apparently, so why not do the decent thing an hit the donate button you tight bastard?
He can also provide content for your website like market reports and commodity prices. And if you haven't got a website he can design one for you. In short, the man's a bloody genius.

Disclaimer

All comments on this website are the sole opinion of the author, and are not capable of nor intended to constitute professional advice. Neither can Nogger give any guarantee for the accuracy of any of the information or data contained within this site.

The guy is clearly deranged and you should almost certainly ignore everything that he says.